Although there have been some ups and downs for Bitcoin as of late, they still managed to close out the week with an amount well above $50,000. It is significant because this amount had been eluding Bitcoin for some time now. However, BTC has still managed to remain active and sustainable. Although stocks have seen a decrease, BTC has experienced an increase in buyer support, and USD/BTC is well within 10% to 15% of their all-time record highs. With this in mind, we have observed five key reasons as to why all this has happened, and they have said that these factors will play a key part for traders in the weeks to come as Bitcoin’s price action may be affected too.
USD experiences gains at the expense of stocks
Indices have fallen all over the place as the tide turns regarding the equities miracle which occurred in 2020. There have since been warnings stating that this route is not yet over, with indices expected to continue to be affected in the near future.
With such harsh, short-term stances regarding equity traders, the U.S dollar has since decided to boost its pre-existing performances in an effort to strengthen its performance and economy.
The inflow of stimulus checks
Lawmakers have decided to inflate the supply to an amount close to $2 trillion after they elected to pass the most recent stimulus package as a result of the ongoing pandemic. This, however, seems counterproductive for the U.S dollar.
Furthermore, due to Bitcoin’s increased perception and popularity in the eyes of the general public, there have been high expectations that a portion of the money from the stimulus checks will eventually make its way into BTC as well.
2nd biggest weekly close: the target for Bitcoin
As aforementioned, BTC managed to close out the week with over $50,000. Along with the money coming in from the stimulus checks, Bitstamp experienced a local high of nearly $51,200. However, it should be mentioned that interest in BTC is expected to fluctuate.
Many are hesitant to sell
Miners and traders alike are hesitant to sell, especially at an amount close to $50,000. This business-as-usual mindset among the market participants has resulted in a steady decrease to exchange reserves and flows into exchanges as well.
People can get greedy
The Crypto Fear & Greed Index has signaled a return to levels indicating ‘extreme greed’ regarding investors. This was further proven as the Index had recorded a hit of 81/100 on Monday, as compared to the 38/100 measurement the week prior.